Kyobo Securities said on the 22nd that Orion likely beat market expectations with its first-quarter results this year. It kept a Buy rating and raised the target price to 190,000 won from 160,000 won. Orion's closing price in the previous session was 135,400 won.
Kyobo Securities estimated Orion's first-quarter simple sum sales and operating profit by corporation at 934.9 billion won and 169.1 billion won, respectively. Year over year, sales rose 16% and operating profit increased 28%. It estimated that first-quarter operating profit on a consolidation basis likely exceeded market expectations by about 8%.
Kwon Woo-jung, an analyst at Kyobo Securities, said, "Strong sales during the Lunar New Year and Tet holiday season and a continued supply shortage relative to demand in Russia drove overseas earnings growth."
The Korea subsidiary was expected to see operating profit rise 14% from a year earlier. In particular, even amid sluggish domestic demand, channels such as e-commerce and Asung Daiso Co. likely posted double-digit growth. On the cost side, burdens eased for cocoa, flour, and sugar, but higher prices for almonds, edible oils, and eggs added pressure.
The China subsidiary was estimated to have increased sales and operating profit by 25% and 43%, respectively, from a year earlier. It said high growth is continuing, centered on snack shops and e-commerce exclusive products amid the Lunar New Year effect. It analyzed that the share of snack shops and e-commerce expanded to 40% last year.
The Vietnam subsidiary was seen to have increased sales by 18% and operating profit by 25% from a year earlier. It is promoting an expansion of MT (hypermarket) channel sales recently from the previous focus on TT (traditional trade) channels.
The Russia subsidiary was expected to have increased sales and operating profit by 35% and 65%, respectively, from a year earlier. Despite heavy snowfall in Russia in January, it said high growth continued thanks to distribution promotions such as X5 and tenders. With a supply shortage persisting relative to demand in Russia, it assessed that sales are expected to rise with the expansion of the Tver Plant 2 in September 2027.
Kwon said, "Until last year, Orion saw a continued sluggish trend in China due to the restructuring of its business in the region," but added, "For the first time in a while, the Lunar New Year promotions performed well, and expansions are underway in Korea, Vietnam, and Russia, with earnings momentum standing out within the food and beverage sector."